Marc wanted to replicate the e-commerce model pioneered by online bookseller Amazon. He started his career by running mail orders for a sheet music company called Cherry Lane. He gained the experience needed to eventually disrupt that industry.
During the 80s and 90s, Blockbuster Video dominated the movie rental industry. Marc had heard that DVD’s were being tested in several U.S. markets, and he wanted to explore the concept of selling the compact new digital format online. He and Hastings could not find a DVD, so they tested the idea with a compact disc. They wondered if they could mail these CD’s. Thus they tried delivering the CD to Reed’s house through mail. That’s when they knew that was it.
This is how Netflix took birth. The initial business model was to let people rent videos by selecting it online and having it delivered to their door. This service was unparalleled at that time and was a big shift in the industry.
Netflix’s mail order system revolutionized their ability to rent movies from the convenience of our own homes and opened the doors to online streaming as we know it today.